February 1, 2013

Illustration by Rick Nease/Detroit Free Press

Detroit Free Press Staff Writers

'Kilpatrick Enterprise' trial coverage

Former Detroit Mayor Kwame Kilpatrick, his father, Bernard Kilpatrick, and his longtime contractor friend Bobby Ferguson were convicted in U.S. District Court in Detroit. They were accused in a conspiracy to enrich themselves by rigging City of Detroit contracts through the mayor's office. Kwame Kilpatrick was convicted on 24 of 30 counts, Ferguson was found guilty on nine of 11 counts and Bernard Kilpatrick was convicted on one of four counts. A fourth defendant, former water department director Victor Mercado, pleaded guilty to conspiracy during the trial and awaits sentencing.

The defense in Kwame Kilpatrick's public corruption trial got off to a rocky start in presenting its case Thursday.

Its first witness admitted that the ex-Detroit mayor used nonprofit funds to throw his grandfather a 90th birthday party; the second witness openly laughed when he learned Kilpatrick used nonprofit funds to pay for yoga.

"I would highly doubt that that would be proper. ... Not even close," said accountant Gary Leeman, an expert witness in nonprofit and tax-exempt matters.

Leeman was responding to questions from Assistant U.S. Attorney Michael Bullotta, who got Leeman to admit that Kilpatrick may have misused his nonprofit Kilpatrick Civic Fund for personal expenses, including:

• A $2,000 lease payment for a top-of-the-line Cadillac DeVille.

• A $1,228 indoor water park outing for the ex-mayor's wife, Carlita Kilpatrick, and the couple's children.

• At least $900 for private yoga lessons.

Leeman said while the Cadillac could be considered a "prorated" business expense, it's a questionable expenditure that "if I were the accountant, I would ask about it." The water park and yoga lessons, however, likely were improper personal uses of the fund, he said.

Leeman's testimony followed that of about 70 witnesses who testified on behalf of the government, which rested its case Thursday after 4 1/2 months of trial.

He helped bolster the defense's argument that there's no proof that Kwame Kilpatrick unlawfully padded his bank accounts through illegal acts and hid the money from the government.

According to the government, Kilpatrick spent nearly $841,000 more than what he earned as mayor of Detroit from 2002 to 2008.

Leeman testified that there's no way of knowing for sure where Kilpatrick's extra money originated and said the government should have kept track of how much money Kilpatrick had before he became mayor. The defense has suggested that the Kilpatricks had money before Kilpatrick became mayor.

Leeman's testimony followed that of Sophie Plastiras, a sales director at a Greektown hotel banquet center who also may have been helpful to the prosecution.

Her testimony was supposed to bolster the defense's claim that Kilpatrick received large cash donations at his 36th Splash of Red birthday party at the Atheneum hotel. Plastiras helped arrange the black-tie affair, and noted that about 1,500 guests attended the ex-mayor's birthday party.

But on cross-examination, Bullotta didn't ask Plastiras about Kilpatrick's birthday party. Instead, he got her to confirm that the nonprofit Kilpatrick Civic Fund was used to help pay for Kilpatrick's grandfather's 90th birthday party in 2009.

Thomas argued that the grandfather's birthday party was a community event and open to the public, therefore a legitimate use of the $2,000 from the civic fund.

But Bullotta objected from his chair, saying loudly, "It was a birthday party."

Before resting its case Thursday, the prosecution countered earlier defense claims that Kilpatrick's contractor friend and codefendant Bobby Ferguson cut checks to himself to cover legitimate business expenses, rather than paying Kilpatrick for political favors.

Ferguson, for example, had argued that some checks seized by federal agents from his Detroit office were used to buy truck parts.

Not likely, countered federal agent Carol Paskiewicz, who testified that that some of the memo lines on Ferguson's checks raised suspicion. For example, she found one 2003 Ferguson check for nearly $9,500 to a jewelry store called Golden Sun. In the memo line, Ferguson wrote the money was for truck parts.